An Australian private equity firm has made a bid of up to $590 million for The Warehouse retail group, with backing from the group’s founder. Adamantem Capital has submitted an unsolicited, non-binding, indicative offer to take over The Warehouse Group, proposing a price range of $1.50 to $1.70 per share. This compares to The Warehouse’s closing price of $1.45 on Monday.
The Warehouse founder Sir Stephen Tindall and interests associated with him, who control nearly half of the group’s shares, support the bid but wish to remain invested in the new company. “Sir Stephen Tindall, The Tindall Foundation, and trustees of certain trusts associated with Sir Stephen Tindall … support the proposal and will remain invested in the company through reinvesting a portion of their consideration in the acquirer of the company,” the board said in a statement to the NZX.
Under the proposal, Tindall and his associates would own 50 percent of the acquiring company, while all other shareholders would be bought out for cash. “The proposal is incomplete and conditional and, as a result, there can be no certainty that any transaction will eventuate. No action is required from shareholders at this time.”
The takeover proposal emerged yesterday following media speculation that an offer was forthcoming and that Tindall aimed to position The Warehouse as a significant player in the grocery market. Chris Wilkinson, managing director of First Retail Group, said that a takeover with Tindall at the helm could help restore the fortunes of the once-dominant retail chain. “This is an exciting time for The Warehouse. Stephen Tindall built the brand; he created that challenger mindset when it entered the market, and that’s what’s been lacking over recent years.”
Wilkinson noted that private equity firms are experienced in streamlining businesses, and combining that with Tindall’s values and understanding of New Zealand could be an “ideal combination.” The Warehouse board has begun a process to restructure and streamline the company around its three core brands: the big barn Red Sheds, Warehouse Stationery, and the Noel Leeming appliance and electronics chain.
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